Lorraine Williamson
Benidorm City Council has suffered a significant legal setback, with the Supreme Court of the Valencian Community ruling that the municipality must pay €330 million in damages to developers Murcia Puchades Expansión SL and Urban Villajoyosa 2000 SL.
The amount, more than twice the city’s annual budget, is a result of changes to urban planning policies that led to the cancellation of construction rights in the Serra Gelada area.
The Serra Gelada dispute
The conflict centres around the APR-7 area of Serra Gelada, an area designated as urban land since the 1960s. The Murcia Puchades family, owners of over two million square metres of land in the area, initiated legal action after Benidorm annulled previous planning agreements. These agreements had granted the developers the right to build in the area, but later changes to municipal policy stripped them of this entitlement.
In May 2024, the Supreme Court ruled in favour of the developers, awarding them compensation for lost construction revenues and investments. The municipality appealed the decision, but this was rejected in a final ruling, meaning the council must now pay the agreed compensation, including accrued interest.
The Mayor’s response
In a recent press conference, Benidorm’s Mayor Toni Pérez addressed the ruling, stating that the municipality would carefully explore all legal avenues to safeguard public interests. He called for calm and emphasised that it was too early to present a final plan of action. However, the opposition has been quick to criticise, urging the mayor to take responsibility for the financial implications of the decision.
A long-running legal battle
This case has its origins in agreements made in 2003 and 2004, which were later extended by various municipal authorities. Several of these agreements have now been deemed invalid by the court, and further lawsuits are still pending. Mayor Pérez previously labelled the ruling of the Valencia Court of Appeal as “nonsense,” and the legal battle appears far from over.
Domingo Monforte, the lawyer representing the Murcia Puchades family, has expressed a willingness to engage in negotiations. “If the city council contacts us, we are ready to meet the next day,” Monforte said.
Financial implications for the city
The financial burden of the compensation has left the City Council searching for ways to mitigate the impact. Mayor Pérez has assured residents that no decision will be made that compromises the city’s interests. In the coming months, it will become clear how the city plans to manage the situation and whether negotiations will offer a potential resolution.
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